Tina K. Russell

March 10, 2008


Filed under: Uncategorized — Tags: , — Tina Russell @ 9:02 pm

Lawsuit Takes Aim at College’s Billing Practices for Study Abroad – New York Times

This is an interesting article and it’s relevant to me, since I’m someone who has, in fact, been cheated by her school (though I was cheated in the hundreds, rather than thousands, of dollars). Also, it deals with an important issue in economics: taxes and subsidies, and how they are essentially the same thing.

Ms. Bombasaro-Brady, who spent a semester in South Africa on a program run by the School for International Training, said Wheaton forced her family to pay full Wheaton tuition, room and board — more than $21,000 that semester — even though the program cost $4,439 less.

“I had an amazing time in South Africa, and I wouldn’t change the experience for anything in the world,” Ms. Bombasaro-Brady said. “But it doesn’t seem right that I was living in a place with no heat, no hot water, no electricity, no Internet, and paying the cost of my dorm room here.”

The plantiff says that the school is sending people on study-abroad programs but requiring them to pay the entire cost of studying in America, and then pocketing the difference. The school maintains that they are simply evening out the costs, such as how they charge students who take courses that require expensive science labs the same tuition as students taking Spanish I. I don’t buy the school’s argument for one second, but even if it’s true, it’s disturbing.

Basically, the school is saying that charging you the same amount for doing something much cheaper is the same as charging you the same amount for doing something much more expensive. The thing is that having the students as a whole subsidize expensive courses is a way of encouraging them to take advantage of the school’s facilities. A fancy new science lab is worth little if only students who take the course absorb the cost; no student would take the course! However, all students must pay for the science lab in the aggregate, through tuition. So, evening out the costs of classes recognizes that higher costs are a disincentive to use the school’s resources, and finds a way to soften that blow by having everyone share the burden. In turn, the fact that classes using an expensive science lab do not cost more, in tuition, than others provides an economic incentive to take those classes: since you’re already paying for it, you might want to take those advanced courses that use advanced equipment to get your money’s worth, and make your academic plan accordingly ambitious. (My school, the University of Oregon, still hasn’t figured this out, and is still trying to find a way to charge you for the air you breathe.)

However, this–charging the student the same amount for doing something less expensive–is the opposite. If what the school says is true (and I suspect it’s not), then they are offering an economic incentive for you not to study abroad. Why should you go someplace with no heat, no running water, no Internet access, and drastically lower cost of living, and still pay for your Masachussets dorm room? Again, if you want to get your money’s worth, leaving the States is a bad choice.

This is a bad policy–a remarkably bad one–for any college that wants to promote its students as globe-trotting wunderkinds. But, I suspect the truth lies behind door number 3: they promote the study-abroad plan, lock you into it, charge you the full amount, and then pocket the difference. Because the student is a consumer, there is a presumption of guilt, here; the school must prove that it’s fulfilling its obligations as a service provider. (That’s simply my opinion, the law may vary. However, when you’re paying money to an institution for a long-term service, you deserve to know how it’s being spent.) Study-abroad programs are already being investigated, rightly, by New York’s attorney general. Schools shouldn’t use the registration glut as an opportunity to take advantage of their students.

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